Correlation Between Sotherly Hotels and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both Sotherly Hotels and Sotherly Hotels at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sotherly Hotels and Sotherly Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotherly Hotels PR and Sotherly Hotels, you can compare the effects of market volatilities on Sotherly Hotels and Sotherly Hotels and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sotherly Hotels with a short position of Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotherly Hotels and Sotherly Hotels.
Diversification Opportunities for Sotherly Hotels and Sotherly Hotels
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sotherly and Sotherly is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sotherly Hotels PR and Sotherly Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels and Sotherly Hotels is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sotherly Hotels PR are associated (or correlated) with Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels has no effect on the direction of Sotherly Hotels i.e., Sotherly Hotels and Sotherly Hotels go up and down completely randomly.
Pair Corralation between Sotherly Hotels and Sotherly Hotels
Assuming the 90 days horizon Sotherly Hotels PR is expected to generate 0.23 times more return on investment than Sotherly Hotels. However, Sotherly Hotels PR is 4.41 times less risky than Sotherly Hotels. It trades about -0.07 of its potential returns per unit of risk. Sotherly Hotels is currently generating about -0.2 per unit of risk. If you would invest 1,787 in Sotherly Hotels PR on September 1, 2024 and sell it today you would lose (38.00) from holding Sotherly Hotels PR or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sotherly Hotels PR vs. Sotherly Hotels
Performance |
| Timeline |
| Sotherly Hotels PR |
| Sotherly Hotels |
Sotherly Hotels and Sotherly Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotherly Hotels and Sotherly Hotels
The main advantage of trading using opposite Sotherly Hotels and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotherly Hotels position performs unexpectedly, Sotherly Hotels can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.| Sotherly Hotels vs. Sotherly Hotels | Sotherly Hotels vs. Service Properties Trust | Sotherly Hotels vs. Braemar Hotel Resorts | Sotherly Hotels vs. Summit Hotel Properties |
| Sotherly Hotels vs. Summit Hotel Properties | Sotherly Hotels vs. Diamondrock Hospitality | Sotherly Hotels vs. RLJ Lodging Trust | Sotherly Hotels vs. Chatham Lodging Trust |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |